China orders all North Korean companies in country to close

Beijing steps up pressure after UN sanctions over nuclear crisis

The North Korean and Chinese flags: The Korean nuclear crisis has put China in an awkward position and Beijing repeatedly emphasises its stance calling for talks. Photograph: Jeon Heon-Kyun/EPA

China has ordered North Korean companies in the country to close as it implements United Nations sanctions, stepping up pressure on Pyongyang to abandon its nuclear weapons programme.

China’s commerce ministry issued a statement on its website ordering North Korean firms in the country to shut within 120 days of the United Nations Security Council’s latest of round of sanctions, which were passed on September 11th with Beijing’s backing.

Beijing has come under pressure from US president Donald Trump to use its influence in North Korea to force President Kim Jong-un to end the country’s nuclear programme.

China was North Korea’s wartime ally against the US during the Korean War (1950-53) and has supported the reclusive state for decades.

There are questions about the effectiveness of sanctions. North Korea’s economy grew nearly four per cent last year, its fastest pace in 17 years, but 93 per cent of its economy is based on trade with China.

Since North Korea stepped up its nuclear programme, relations have become strained and it has already banned textile trade. While it has capped the oil supply, China still supplies fuel to North Korea, and analysts say that cutting off the oil supply would be the ultimate sanction.

The ban will also apply to China-North Korea joint ventures, the commerce ministry said.

“Non-profit projects approved by the UN Security Council will be exempt,” the statement said.

North Korea and the United States have engaged in an exchange of insults over the nuclear standoff on the Korean peninsula. Mr Trump called Mr Kim “rocket man” on a “suicide mission” while the North Korean leader called Mr Trump a “mentally deranged dotard” and accused him of declaring war on North Korea.

The Korean nuclear crisis has put China in an awkward position and Beijing repeatedly emphasises its stance calling for talks.

“Sanctions and the promoting of talks are both the requirements of the UN Security Council. We should not overemphasise one aspect while ignoring the other,” foreign ministry spokesman Lu Kang told a briefing.

The Global Times newspaper said North Korean companies’ income from operating in China accounted for a “considerable part” of Pyongyang’s foreign currency.

Lu Chao at the Liaoning Academy of Social Sciences said the shutdown would have an impact on North Korean revenues.

“North Korea’s largest investment in China is the Chilbosan hotel in Shenyang, Liaoning province, and the major shareholder has already become a Chinese company,” he told the Global Times.

The commerce ministry previously announced bans on exports of gas condensate and liquefied natural gas to North Korea, and said it will ban the export of refined petroleum products from October 1st.